OpenAI has successfully raised $6.6 billion despite facing leadership challenges and concerns about an AI bubble, marking a significant milestone in the tech sector.
On Wednesday, OpenAI announced the completion of its latest funding round, achieving a staggering valuation of $157 billion. This sets a new record for the largest venture capital round in history, surpassing the previous record held by another tech venture which raised $6 billion earlier this year.
The funding was spearheaded by a prominent venture capital firm and included major investments from several tech giants. Notably, Apple, which was rumored to be considering an investment, ultimately decided not to participate.
This substantial funding round comes amid a tumultuous period for OpenAI over the past year. Following the transformative launch of ChatGPT in 2022, OpenAI quickly attracted attention and investment, particularly from a major tech firm that invested $13 billion. However, tensions surfaced last November when a failed attempt by the nonprofit board to remove CEO Sam Altman highlighted internal disagreements, leading to the resignation of key executives, including co-founder Ilya Sutskever and CTO Mira Murati. Additionally, co-founder Greg Brockman has taken a leave of absence, and the organization is transitioning from a nonprofit to a for-profit model.
Despite a cloud of uncertainty among investors, a backlash from consumers wary of AI developments, and questions regarding the viability of the AI boom, the recent capital infusion demonstrates that significant investors continue to bet on OpenAI’s future.
OpenAI generates revenue through subscriptions to its ChatGPT Plus, ChatGPT Enterprise, and API services. As of August, the company reported over 200 million weekly users of ChatGPT, a figure that has doubled since November 2023. The company anticipates sales of $11.6 billion in the upcoming year; however, maintaining and developing AI models comes with high costs, and projections indicate that OpenAI could face losses of up to $5 billion this year.
